Differentiate between line filling and line stretching. Provide examples from the products that exist in the Pakistani Market.
Introduction
Increasing the number of products within an existing product range with similar products that have additional or different features. When a business already has a well established brand, it can use line stretching to expand its product line and help increase its market share without having to develop substantially new products. The group of related products which uses same marketing efforts to reach the consumer. The product line identifies profitable and unprofitable products and helps in allocation of resources according to that. The product line understanding helps the marketer to take line extension, line stretching, line pruning and line filling strategies of the company. A product line extension is the use of an established product brand name for a new item in the same product category. Line Extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes. This is as opposed to brand extension which is a new product in a totally different product category. Line extension occurs when the company lengthens its product line beyond its current range. The company can extend its product line through line filling, down-market stretch, up-market stretch, or both ways.
Product line filling:
A business strategy that involves increasing the number of products in an existing product line to take advantage of marketplace gaps and reduce competition . Many businesses use line filling to round out an already well established product line and to help increase the market success of new related products. It’s the process of introducing new products into a product line at about the same price as existing products. It is the addition of further items to the current line of products that a company is dealing in
Product line stretching:
Increasing the number of products within an existing product range with similar products that have additional or different features . When a business already has a well established brand , it can use line stretching to expand its product line and help increase its market share without having to develop substantially new products.
Example
The definition of product line stretching is essentially, introducing new products into a product line. This means that company produce more products in different ranges; from higher end to lower end products. For example, Toyota is generally a company that produces durable (questionable) and low-price cars. The way Toyota is product line stretching is by creating a new higher end brand, Lexus. This model has increased Toyota’s sales and allowed them access to different markets. Also, they are able to access new customers who are looking for a higher end trustworthy car. Lastly, Toyota has been able to scare-off competitors and improve their reputation.
Product line stretching also has been effective for Converse. They have been able to create many versions of their Chuck Taylor shoes. They range from $130 shoes that are sold in stores like Barney’s, to $30 shoes that can be sold in stores like Target. We have gotten a chance to hear from a Chief Marketing Director who spoke about how they have managed to more than double sales because of this product line stretching. They have been able to tap into new segments and target different types of customers. Converse’s higher end shoes have been able to target higher up customers that are looking for a more expensive shoe, but still like Converse’s shoes. This hasn’t diluted the companies image because they are able to maintain sales for their lower end Chuck Taylors.
Product line stretching has allowed both Toyota and Converse to reach new segments and customers that have increased their sales and reputation. Product line stretching is now always effective for companies to use, but in these two cases it has proven to be successful.
The Correct Answer and Explanation is :
Product line filling and product line stretching are two distinct strategies that companies employ to expand their product offerings within an existing product line.
Product Line Filling involves adding more items within the existing range to fill gaps and reduce competition. This strategy aims to offer a more comprehensive selection to consumers at similar price points. For example, a company might introduce new flavors or sizes of an existing product to cater to diverse consumer preferences.
Product Line Stretching, on the other hand, entails extending the product line by introducing products at different price points, either higher or lower than the current offerings. This approach allows a company to target new market segments and increase its market share without developing entirely new products. For instance, a brand known for its premium products might introduce a budget-friendly line to attract cost-conscious consumers.
Examples from the Pakistani Market:
- Product Line Filling:
- Nestlé Pakistan: Nestlé has expanded its dairy product line by introducing various flavors and sizes of its milk and yogurt products. This strategy caters to different consumer tastes and preferences, filling gaps in the market.
- Product Line Stretching:
- Unilever Pakistan: Unilever has employed product line stretching by introducing premium variants of its existing products. For example, the launch of premium ice cream brands like Magnum alongside its regular ice cream offerings allows Unilever to target both high-end and budget-conscious consumers.
By implementing these strategies, companies can effectively expand their market presence and meet the diverse needs of consumers.
For a more detailed explanation, you might find the following video helpful:
videoLine Stretching and Line Filling Explainedturn0search6